ICE cotton prices recover amid rising crude oil & weather concerns

Yesterday, the ICE cotton December contract settled at 69.92 cents per pound (0.453 kg), up 1.37 cents. The contract had experienced losses in the previous three consecutive trading sessions.

The dollar index strengthened yesterday following a positive economic outlook. US GDP numbers and job data were better than expected. Global crude oil futures rose by 1.5 per cent due to concerns about crude oil supply, including potential disruptions in Libya and Iraq's planned production cuts. The rise in crude oil prices has made polyester, a substitute for cotton, more expensive, which could further support cotton prices.

Today's trading volume was 31,508 contracts, compared to 30,994 contracts cleared yesterday. According to ICE data as of August 28, the inventory of deliverable No. 2 cotton futures contracts remained stable at 266 bales.

The USDA's export sales report, released on August 29, showed a 45 per cent increase in US cotton export sales for the 2024-25 market year, totalling 135,200 bales.

Weather forecasts indicate heavy rains are expected from Texas to Georgia, which could delay the harvest in South Texas and cause some cotton loss. The rains may lead to flooding in parts of southern Houston and Texas, with thunderstorms also expected over the weekend.

Currently, ICE cotton for December 2024 is trading at 70.17 cents per pound, up 0.25 cents. Cash cotton is trading at 65.63 cents (up 1.39 cents), the October contract at 69.93 cents (down 0.20 cents), the March 2025 contract at 71.75 cents per pound (up 0.23 cents), the May 2025 contract at 72.93 cents (up 0.23 cents), and the July 2025 contract at 73.63 cents (up 0.26 cents). A few contracts remained at the level of the last closing, with no trading noted today.

Fibre2Fashion News Desk (KUL)